Germany’s Lionheart Closes €2.2B Lithium-Geothermal Deal
Why this is here: The Lionheart project secured funding despite a challenging year for industrial decarbonization projects, signaling investor confidence in well-structured deals and highlighting a growing partnership between the EU and Australia.
Vulcan Energy Resources secured €2.2 billion (US$2.5 billion) in financing for phase one of its Lionheart project in Germany. The project will combine geothermal power generation, lithium extraction, and lithium hydroxide production. Lionheart aims to produce enough lithium for 500,000 EV batteries annually and heat for 90,000 homes starting in 2028.
The financing package included government loan guarantees, equity sharing with offtakers, and banks specializing in climate finance. Vulcan implemented ten de-risking measures to attract investors amid geopolitical uncertainty. These included fixed and floating lithium prices, a conservative debt-to-equity ratio of 60:40, and a €108 million contingency fund.
Germany’s state-owned bank, KfW, invested €150 million for a 14% stake. Vulcan also listed shares on the Australian stock market and secured a “dark green” sustainability rating. Multiple revenue streams from lithium, power, and heat sales further reduced risk for investors.